Use the Following to Answer Questions

question 55

Multiple Choice

Use the following to answer questions:
Scenario: Ben and Nick
Ben and Nick are the only members of a community. They have revealed the marginal private benefits they each receive from a public good whose marginal social benefit is known. In addition, the marginal social cost (MSC) of the public good is known and is constant.
-(Scenario: Ben and Nick) Look at the figure and scenario Ben and Nick. Q₄:

• A) is the socially optimal level of provision of the public good.
• B) is equal to P₄ + P₃ in marginal social benefits.
• C) represents an amount at which the MSB is greater than the MSC.
• D) will not be produced, since neither Ben nor Nick finds any benefit in it at this level.